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Trade finance meets ISO 20022: It’s not a question of if.

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TLDR:

Trade finance is moving towards adopting ISO 20022 standards, which will have significant benefits, challenges, and costs for banks. The migration to ISO 20022 will bring about more structured data, improved accuracy, efficiency, and reporting in trade finance operations. However, the transition will require significant adjustments to bank systems and operations, potentially costing billions of dollars. Banks need to take immediate action to prepare for the migration to ISO 20022 and ensure their systems are ready to generate MX payment messages by November 2025.

Key Points:

  • ISO 20022 is reshaping the world of trade finance, moving towards a common language with rich and structured data.
  • The migration to ISO 20022 will bring benefits such as enhanced granularity, improved accuracy, and efficiency, but will also pose challenges and costs for the industry.

Article Summary:

The article discusses the adoption of ISO 20022 standards in trade finance and how it will impact the industry. ISO 20022, defined by the International Organization for Standardization (ISO), is considered the next generation of financial messaging standards with a focus on structured data. The migration to ISO 20022 will bring benefits such as improved accuracy, efficiency, and reporting in trade finance operations. However, the transition will require significant adjustments to banks’ systems and operations, potentially costing billions of dollars. Banks need to take immediate action to prepare for the migration to ISO 20022 and ensure their systems are ready to generate MX payment messages by November 2025. While the adoption of ISO 20022 holds promise for the trade finance industry, a cautious approach is necessary to address challenges and ensure successful implementation.

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